INSIGHT
culture. Leadership must identify what
employees want, what the company wants,
and how to get there. It takes commitment
and time, but it can be done.
3. Poor hiring
There’s a saying, “When you just hire a pair
of hands, you never get a head.” For long-
term success, companies must hire people
with the desire and ability to grow with the
company and help lead. Warm bodies aren’t
enough. This can be harder to do when
hiring out of a union hall. But even in those
circumstance, it’s probably better to pay any
show-up costs and ask for a more qualified
employee. That’s far less costly than carrying
an employee who continues to perform
substandard work or has a bad attitude.
4. Poor financial systems
This is a big bullet point under the broader
topic of capital and financial management.
Many construction companies can’t track if
they’re making or losing money until the very
end of the year. I’ve even seen companies
that fail to bill for all their work because
they are so busy completing projects and
doing estimates for new projects. Good
financial systems are absolutely paramount
to prevent such oversights. Accounting
software can assist but won’t solve
everything. A good accountant or in-
house financial manager may be advisable
—one that will provide detailed accounting
at least every few months.
7. Family-run corporations
These businesses have an even higher
failure rate than the typical company.
Family-run businesses have a unique
set of challenges that generally hurt
future generations more than the current
generation. This is a complex issue with
many facets to consider.
5. Inefficient operations
Inefficiency rarely happens in big, easily
identifiable chunks. Inefficiency typically
impacts that company in 10-or-20-minute
increments. A good example is a seven-
person crew standing around on a jobsite
waiting for a truck to show up. Over the
course of the year, this type of wasted
time can add up to the point that all
profitability is sacrificed.
Larry Kokkelenberg, the president at
Center for Business Development, will
host an education session at ConExpo-
Con/Agg titled ‘Top Ten Reasons Why
Construction Businesses Fail’. The
session will take place Thursday, March
12 from 13:00 to 14:30.
6. Poor customer service
A lot of companies do not listen to their
customers very well. Companies just
focus on completing the work according to
the contract. If they get paid, they assume
all is good. But remember, construction
companies are in the business of serving
customers, and that includes good
customer service.
CLASSIFIEDS
48
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